Monday, September 27, 2010

Transco needs P43B for capex in 2010, 2011

By Amy R. Remo
Philippine Daily Inquirer
First Posted 02:01:00 09/27/2010

Filed Under: Economy and Business and Finance,Privatisations

MANILA, Philippines—State-run National Transmission Corp. said it needed more than P43 billion for its capital expenditure budgets for this year and 2011, but the “now cash-strapped firm” may find it difficult to raise these funds following the privatization of its transmission operations.
Moslemen Macarambon, the newly appointed president of Transco, said that since the company was privatized in January 2009, no budget has been approved for it by the Office of the President and the Department of Budget and Management.
“This is because the source of funding for Transco’s operations has yet to be settled among the Power Sector and Assets and Liabilities Management Corp., the Department of Finance and the DBM,” Macarambon explained.
Macarambon noted that Transco should be earning from the concession fees coming from National Grid Corp. of the Philippines (NGCP) after this group took over the Transco concession on Jan. 15, 2009.
The government, through Transco, formally turned over to NGCP last year the operation of the country’s transmission network through a concession agreement valued at $3.95 billion. The consortium is composed of OneTaipan Holdings of Henry Sy Jr., (which earlier acquired the 30-percent stake of Monte Oro Grid Resources Corp.), the Calaca High Power Corp. of the Coyiuto group (also with a 30-percent stake) and China’s State Grid Industry Development Ltd. (40-percent stake).
Transco documents showed that these concession fees had amounted to P18.04 billion in 2009 and P10.2 billion in the first half of the year.
“Kindly note that these income from concession fees were remitted by the concessionaire directly to PSALM’s account in accordance with the concession agreement. Not a single centavo was received by Transco up to this date,” Macarambon said.
“Therefore, even if we show a very profitable result of operation, cashflow-wise, we are a cash-strapped company because the issue on funding the operational requirements of Transco, including payment of the separation benefits and right-of-way (ROW) claims, has yet to be resolved among PSALM, DOF and DBM,” he added.

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